Housing Benefit

Steve Webb Excerpts

Wednesday 13th October 2010 Westminster Hall

[Margaret Hodge (Barking) (Lab)]

I am very grateful, Mr Gray, to all the right hon. and hon. Members who have joined me today to take part in a hugely important debate on what I consider to be the Government’s very ill-conceived plans to slash housing benefit for the poorest families in the poorest communities—plans that will inevitably force thousands of people to leave their homes, their families and their friends as they try to find an affordable roof over their heads and the heads of their loved ones. In my view, the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), can feel nothing but shame at having to come to Westminster Hall to defend such ill-conceived proposals. With his background and knowledge, he should know better.

When we last debated this issue, my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) eloquently outlined the devastating implications of the Government’s plans. In addition, we have all been provided with evidence on the impact of the proposals by my hon. Friend the Member for Westminster North (Ms Buck), whom I congratulate on her well deserved place on the Opposition Front Bench, and by the research carried out by a range of organisations working in housing.

The Government’s proposals on housing benefit have to be considered alongside the other proposals that were announced at the Conservative party conference last week: the capping of all benefits that a family can receive at £500 a week and the ending of the universal child benefit. All of that comes on top of the housing benefit cuts set out in June and the cuts to child tax credit, maternity allowance and the child trust fund.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I am grateful to the right hon. Lady for giving way and I congratulate her on securing this debate. Because I am sure she wants to be part of a responsible Opposition, I think it might help our discussion if, in her remarks, she set out the alternative proposition. Is it her position that rents and housing benefit should simply be uncapped and that people on benefits should be able to choose to live wherever they want to, without any limit being imposed, or does she accept the principle of a cap?

[Margaret Hodge]

As the Minister will know, the Labour Government themselves set the housing allowance. The purpose of this debate is to demonstrate that the intent of the present Government and of the Minister himself will not be achieved by the proposals that he has put before us. That is what I intend to do this morning.

--- Later in debate ---

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I have already congratulated the right hon. Member for Barking (Margaret Hodge) on securing this important debate. I also congratulate the hon. Member for Westminster North (Ms Buck); the Select Committee’s loss is the Labour Front Bench’s gain. She and many other hon. Members who have spoken bring to the debate a great deal of expert knowledge on housing. In the eight minutes remaining, I shall do my best to respond to some of the key points that were made.

My hon. Friend the Member for Colchester (Bob Russell) is a doughty campaigner on housing issues and I hope that he always will be. He raised very important questions. Are the measures not bad for child poverty? What about disabled people? A number of hon. Members mentioned the position of vulnerable groups. My response to my hon. Friend is twofold, but principally it is that if we examine what we are spending on housing benefit, we see clear evidence that a significant part of our spending is not subsidising people in need to have decent housing, but subsidising landlords. In each of the past five years, we spent an additional £1 billion in real terms; each year it was another billion, then another and then another.

I want to put a hypothetical scenario to my hon. Friend. The Department for Communities and Local Government says to the Chancellor of the Exchequer, “We want to spend £1 billion next year building affordable homes.” The Chancellor says, “Yes, I’d like to do that.” Then he goes to the Department for Work and Pensions and we have just put in a bid for another £1 billion and another £1 billion for housing benefit, and he has to go back to the DCLG and say, “I’m sorry. The DWP has claimed that £1 billion. It’s not available for affordable housing. It’s not available for tackling child poverty.” The crucial point is that we have a housing benefit system that protects the vulnerable but does not pre-empt resources that could be spent on the very things on which we in this Chamber want to spend money.

[Ms Buck]

rose—

[Steve Webb]

I wonder whether the hon. Lady will forgive me—

[Glenda Jackson]

Will the Minister give way?

[Steve Webb]

No. I will give way to the right hon. Member for Barking, who initiated the debate, but in the remaining seven minutes, I want to respond to some of the points made in the debate.

I want to correct a number of the inaccurate impressions that have been given. As the hon. Member for Westminster North said, it is a helpful focus in this debate—as distinct from our July debate, which was on the position of tenants—to ask about the position of the receiving local authorities. That is an entirely valid point. We are in discussions with our colleagues in the DCLG. We are working with the local government associations across the country to work out how best to support local authorities, which will face challenges; I do not dispute that for a second.

The allocation of the discretionary housing payments, which will be trebled from £20 million to £60 million, is part of the picture. As the hon. Member for Edinburgh East (Sheila Gilmore) pointed out, one of the issues for people will be difficulty in securing deposits, and one of the things that discretionary housing payments can be used for is to assist people in paying for deposits. That is part of the purpose of the scheme. We have deliberately trebled that money and, although I cannot say anything definitive about the allocation of that funding, inevitably we shall want the money to go where the need is greatest, and inevitably that means that London will get a significant slice of that money. That is clear, and I think that it will help.

I want to question the description that we have heard of the private rented sector in London. I hesitate to do that in a room full of London MPs, but I shall give it a try. It has been presented as though it is an incredibly static situation, in which people live in communities for generations and it is always the same property, yet surely hon. Members would accept that there is massive turnover in the private rented sector in London. People move in and out of properties all the time.

The idea that there are static communities where any disruption will somehow undermine the community seems to me a parody of what is actually going on. The same applies to the suggestion that in the most expensive parts of London, there are mixed communities, with people at all income levels. The only people who can afford very high rents are the very rich and the very poor; there is nobody in the middle. The suggestion that we are somehow disrupting those terribly cosmopolitan, mixed communities is not true. [Interruption.] Indeed, it is not true. What can we do about the situation?

[Margaret Hodge]

I think that the Minister has demonstrated, as he will have heard from the comments around the room, a lack of understanding of the nature of the population affected. I am referring to the families, about whom we have concern, who will be dislocated by his proposals. Will he give an undertaking to do just a little bit of research that will demonstrate the potential impact on movement across London, which families that will involve and how they will be impacted? If we shared that research and the evidence, we could then have a sensible debate about the impact of the Minister’s proposition. Will he give us that assurance today?

[Steve Webb]

Like the right hon. Lady, I am keen to have a sensible debate on this subject. She mentioned the evidence that the Mayor of London has produced. The Mayor met my right hon. Friend the Secretary of State towards the end of September, and we are in close dialogue with London local authorities and others so that we do understand the implications of the changes.

With regard to turnover in the private rented sector, the local housing allowance scheme only came in just over two years ago, in April 2008, and 75% of private rented sector cases are now within the scope of that scheme. There is huge turnover of people. People are making decisions about new—

[Emily Thornberry]

Will the Minister give way?

[Steve Webb]

No. People are making decisions about new tenure choices all the time, and we are saying this: why should those whose rents are wholly paid by the taxpayer not face the same constraints as those who are in low-paid work? I take the point made by the hon. Member for Westminster North that the two are not distinct categories; there is movement between the two. However, people in low-paid work are not choosing to live in the most expensive parts of the city, because they know that they would have to be able to pay those rents out of their wages. Why should people on benefit be in an advantageous position, in terms of their housing choice, compared with those in low-paid work? That simply is not right.

I am convinced that nothing in my language or my ministerial colleagues’ language is about clearances or scroungers. That is not what we are talking about. We are talking about value for money for the taxpayer, including the low-paid taxpayers in the constituencies of each hon. Member present, whose taxes are going to subsidise those exorbitant rents. Although we have heard that those very high rents are exceptional, I was appalled when I discovered that the 5,000 families to whom we pay the most housing benefit cost the taxpayer an annual £100 million—5,000 families receive £100 million a year just in housing benefit, leaving other benefits aside. It cannot be right that low-paid workers in our constituencies, people dealing with child poverty and disabled people are paying taxes to pay those rents.

My hon. Friend the Member for Colchester asked about the position of disabled people. One of the changes that has not been reported is the improvements to the system of housing benefit for disabled people who need a non-resident carer. We are spending an extra £10 million on writing off that extra bedroom in the housing benefit assessment, because we recognise the particular needs of disabled people.

These are huge issues and it is disappointing to have only a few moments to respond to them. The crucial consideration is to be fair—yes, to people on benefit, but also to the low-paid taxpayers whose taxes are paying for these things. If we simply pay the full, very high rents, we make it very difficult for people to take work, which will ultimately be the best antidote to child poverty and the best long-term prospect for people. That is the goal of the reforms.